An ethical imperative to speed up the transition
The ethical case for divestment and investment is simple. We cannot, in good conscience, invest in companies that are accelerating climate change, which disproportionately affects the poor, profoundly impacts the environment and, if unabated, is predicted to wipe out a large proportion of global GDP.
We still have the chance to avoid dangerous climate change and meet our increasing energy needs. Zero-carbon technology like solar panels and energy storage is becoming more efficient and cheaper far faster than anyone predicted. But we are continuing to make short sighted decisions in support of high carbon infrastructure. The window for action is closing rapidly, so our response must be to accelerate the transition now.
A legal obligation?
As more is known about climate change and the harmful impact of fossil fuels, an increasing number of people are arguig that the law requires trustees to divest invest. The most high profile opinion comes from leading charity law expert, Christopher McCall QC. Read the legal opinion here
Financially prudent; get out of high risk fossil fuel investments
The financial sector is waking up to the systemic risks posed by high carbon investments. Leading organisations including The Bank of England, Cambridge University and Mercer’s have warned that we cannot avoid these risks unless we all take action to move towards a zero carbon future.
As well as the need to address this collective action problem, specific companies are becoming less attactive. Rcent commitments from governments and businesses, particularly in 2015 at COP21 in Paris, gave a clear message that the transition away from fossil fuels is accelerating and unstoppable. Fossil fuel companies are facing a combination of government regulation and increasing competition from new technologies which significantly undermines their ability to offer the returns they once did.